Cashflow Positive New Builds – Do They Exist?

As developers are getting more keen to shift units then this is when new-build can start to become attractive, as they now ’stack’. By securing up to 30% discounts off current true market value, new build apartments and houses start to make financial sense. Many investors steered clear of new-build, and quite rightly so, as they were usually over-valued, and the yields took a bashing when mulitple units compete to secure tenants!

However the guys at Property Horizons show how new-build apartments can actually make sense, when you secure a decent discount from the developer. They have given some examples of some recent units they have sold in Liverpool, these were for some luxury apartments with instant £40,000 of equity build in, large positive cashflow from day one and also high rental demand waterfront location.

  Example Financials For 2 Bed Apartment With Parking

 For 80% LTV Residential Finance = Cashback

Market Value: £160,000 (As Colley’s Valuation)

Purchase Price: £120,000

25% Deposit Paid By Us:  (£40,000)    

Finder’s Fees And Purchasing Costs: £5,000 

Cashback : £8625

Net Cashflow (Less costs): +£3625

For 75% LTV Residential Finance = Huge Cashflow

Market Value: £160,000 (As Colley’s Valuation)

Purchase Price: £120,000

25% Deposit Paid By Us:  (£40,000)   

Net Rental Income: +£300 pcm

Finder’s Fees And Purchasing Costs: £5,000 

For 65% LTV Buy To Let 

Market Value: £160,000 (As Colley’s Valuation)

Purchase Price: £120,000

25% Deposit Paid By Us:  (£40,000)

10% Deposit Paid By You:  (£16,000)     

Net Rental Income: +£200 pcm

Finder’s Fees And Purchasing Costs: £5,000 

These financials just highlight that, given the right discount new-build units can start to look more attractive to investors, especially those investors who are looking for low maintenance, and higher end rentals.

Property Horizons are specialist property sourcing experts for both UK and also overseas property investments, they also source fully rented non new-build properties for investors with their below market value armchair portfolio building service. You can register here to be added to their members only ready-made-deal email list for their BMV deals.

To view their current investment deals both for the UK and overseas you can visit their website here.

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